The Central Bank said Sri Lanka's economy will expand 7.5 percent in 2013 after slowing to 6.8 percent in 2012 helped by a global recovery, monetary easing and better weather for agriculture.
The central bank in its Recent Economic Development Report said factory industry and services will expand with a recovering global demand.
For the rest of 2012, growth will slow to 6.8 percent from 8.2 percent last year.
During the first half the economy has grown 7.2 percent with monetary policy tightened to address a balance of payments crisis.
Inflation which peaked to above 9.0 percent may remain in higher single digits for the rest of the year but will reduce after March 2013.